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44 Percent of Global Oil Production Takes Place in Countries with High Risk of Resource Nationalism

March 07, 2012

Mounting tensions with Iran have many keeping a watchful eye on global energy prices. However, Iran is not the only potential trouble-spot.

The results of Maplecroft’s Resource Nationalism Index show that a full 44 percent of global oil production currently occurs in countries that pose a ‘high’ or ‘extreme risk’ of resource nationalism. In fact, the list includes eight of the twelve members of OPEC .

As Maplecroft defines it, resource nationalism is a rising phenomenon where governments of countries hosting large reserves of natural resources try to secure greater economic benefit from their exploitation or leverage political gain through restricting supplies. This not only has operational and financial implications for extractive companies operating in these countries, but it could create further instability for the global energy markets.

The Resource Nationalism Index identifies the risk of resource nationalism across 197 countries.

Maplecroft included nine countries in the “extreme” risk category:

1.Somalia

2. DR Congo

3. South Sudan

4. Sudan

5. Myanmar

6. Turkmenistan

7. Yemen

8. Iran

9. Guinea

In addition, two thirds of the twelve member nations of OPEC also feature at the top of the index, including Iran (8), Venezuela (12), Iraq (13), Angola (18), Nigeria (21), Libya (22), Ecuador (29) and Algeria (52).

Maplecroft points out that supply-side restrictions on the export of commodities for economic gain, geo-strategic purposes, as well as for domestic consumption reasons are not uncommon. Aside from Iran, examples include long-standing restrictions on the export of uranium to potential nuclear proliferators; Chinese restrictions on exports of rare earth minerals; the cartel-like actions of OPEC in controlling global oil prices; and Russia’s periodic attempts to manipulate its natural gas exports to neighboring countries.

More details about the Resource Nationalism Index are available in this press release.

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